It is hard to make sense of the stock market when it's up 200 points one minute and then down 200 points the next. For sure, anyone who cannot sit out the volatility should not be in the market. That said, down markets make stocks cheaper to buy and nobody got rich buying stocks at the top of the market, but many people have gotten rich by buying good values stocks on the way down.
Just how can stocks be valued when experts tell us there is going to be another recession and things are going to get worse? They may be right, however: The economy has not done well this past two years, but that has not stopped company earnings from expanding. Two companies that continue to do good business are Royal Caribbean (NYSE:RCL) and Carnival (NYSE:CCL). RCL's stock goes ex-dividend on Aug. 10 and pays 10 cents a quarter, which equals a 1.66% yearly dividend at today’s price, $24.78. Also, anyone who enjoys cruising will receive a $100 onboard credit every time she cruises on the line, if she owns 100 shares. The PE is a modest 9.1 and the high/low of the year is $23.41-49.99. It is trading around its lows for the year and is in the industry that may continue to grow its way out of the doom and gloom.
Carnival's stock goes ex-dividend on Aug. 24 and pays a quarterly divided of 25 cents, which equals a very nice 3.28%. The stock traded around at $31.00 on Aug. 9 and has a 12.94 PE. It also gives a super perk to the holders of 100 shares, of a $100 onboard credit every time they book a new cruise.
Both cruise lines also offer a $100 onboard credit to passengers who book a future cruise with a $100 refundable deposit while they are enjoying an existing cruise. For a married couple, this amounts to a $300 onboard credit. Both companies have got their act together and make sure most cruises go out full by reducing the prices until the cruise is sold out. Once they get the passengers on board, they have devised many a way to market themed restaurants, spa treatments, drinks and a whole host of goodies that expand their bottom lines.
With so much doom and gloom about, people will be looking for relief from the constant deluge of negative reports from the media. There is no better value than sailing away from all the trouble and strife and into the calm waters of a luxury, pampering cruise that is bought at a big discount. Goldman has downgraded the cruise line industry when the stocks are trading near their lows for the year.